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What is Online Share Trading?

Online share trading is simply buying and selling stocks (or shares) in a company over the internet. Because online trading is often cheaper and more transparent than using a traditional stockbroker, it's a popular way for investors to buy and sell shares.

To sum it up, online share trading:

·Is a simple way to buy and sell shares in a company online

·Allows you to monitor your trades with complete transparency

·Can be done on most devices with an internet connection, such as a computer, tablet or smartphone

What are the basics of online share trading?

·Shares: Owning a share, or stock, in a company means you own a very small part of that company.

·Share price: The share price will rise and fall based on supply and demand. In other words, the more people want to buy a share, the more its price will rise. Generally, the price of the share goes up and down based on what people believe about a company’s future prospects and profits.

Other factors such as broader economic conditions, market expectations, the likelihood of dividend payments, and even new laws and regulations can also affect a company’s share price. It's therefore worth keeping an eye on the market so you can make strategic decisions about when to buy or sell shares.

How does online share trading work?

At its most basic level, online share trading is essentially a modern-day marketplace. People ask a certain price for their goods (i.e. shares) and others name the price they're willing to pay for them. When these two prices match, a sale takes place and ownership of the shares changes hands. But there’s a little more to it than that.

·Making a bid: For every security listed on the share market, there will generally be a number of offers to sell at a certain price (known as ‘offers’), as well as offers to buy at a certain price (known as ‘bids’).

·Types of bids: You buy shares by putting in your own bid. This can either be an ‘at market’ order, which means you’re happy to pay the price the seller is asking, or an ‘at limit’ order, where you agree to buy if the seller comes down to a certain price.

·Trade confirmation: If there’s a match on what you’re bidding and what someone is prepared to sell it for, the transaction will take place. You’ll receive a confirmation showing details of the trade. In approximately 48 hours, the trade will ‘settle’ and you’ll receive confirmation that you’re now the owner of the shares.

What shares can you buy and sell online?

Most Australian-based online share trading platforms will give you direct access to shares listed on the Australian Stock Exchange (ASX). They may also give you access to shares on other exchanges, including a limited number of shares listed on overseas exchanges, such as the New York Stock Exchange (NYSE) and Nasdaq, which lists technology.

When can you use online share trading?

There are both short-term and long-term strategies for growing your share portfolio. Long-term strategies consider companies with the potential to grow over time, while short-term strategies rely on day-to-day price movements (known as volatility). Short-term strategies involve more frequent trades in order to see a return on your investment.

Related Articles:

Korea leads online share trading October 12, 2000 For the month of October online trading in Korea hit 64.1% of total turnover. Although two years ago online trades accounted for only 1.34% of all trades, for the last year Korea has recorded the world’s highest percentage uptake of online trading. Those most likely to trade online are salaried…

Easy Street Financial Services has launched a online… January 20, 2005 Using EasyBroking you can: Buy and sell shares online for a flat fee of $26.00 (incl. GST). Place your orders directly to the market. Keep up to date with all the latest ASX market information. View your portolio's performance online. Set up your own personalised watchlists. Visit www.easystreet.com.au for more…

Australian Share trading from just $19.95* for… July 27, 2004 * Applies to Internet Preferred trades. To be eligible for Internet Preferred trading, you must be CHESS sponsored through CommSec, operate a Commonwealth Investment Account (CDIA) and trade online.

Key terms to know about online share trading October 30, 2017 Online share trading can be an effective way to invest money and grow your wealth. And since all you need to get started is an internet connection and a computer or mobile device, you can start making decisions and trading shares from anywhere. But before you get started, and even…

Online share trading for beginners October 30, 2017 When you begin your adventure into the world of online share trading, your chosen share-trading platform can have a major impact on the way your investments perform. Some platforms provide the basics, while others come with all the bells and whistles. Some charge a lot for a one-off trade, while…

Director share trading under scrutiny March 10, 2008 New research has found that 23 directors engaged in trading shares in their company during the blackout period between when the books are closed and the announcement of results. The study, which looked at 3255 trades by directors in the year to September 30, also found that directors of 32…

ANZ offers free share trading September 24, 2009 ANZ E*Trade is offering $550 free brokerage for new customers who sign up before the end of the year. That's up to 10 free trades plus you'll enjoy ongoing brokerage from just $21.95 per trade.It costs nothing to join ANZ E*TRADE, and if you're an ANZ Internet Banking customer it…

E*Trade offers international share trading April 15, 2011 In November, E*Trade dropped its brokerage rate from $32.95 to $19.95 per trade. E*Trade has focused its development on tax reporting and international trading services.In 2009, it added a free tax-reporting service. Clients can have a full tax report on any taxable items held on their E*Trade account.Last year, it…

AMP extends services to online trading March 21, 2000 AMP has stated that it will launch its online share trading service ‘in the next few weeks’. AMP plan to outsource the back end processing to Hartley Poynton and the AMP branded site to a source yet to be named. This initiative extends the range of services available to AMP…

Comsec reduces online trading fee to $14.95 April 1, 2000 Comsec has immediately struck back at Westpac by offering online trading at $14.95 via its Commonwealth Direct Investment Account (CDIA). Key differences in these offers are as follows : 1. Comsec requires the customer to establish a CDIA with an intial deposit of $5,000 while Westpac do not require the…

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